Hedge fund Japan Advisory will have a hearing in its fight against the death-sentence imposed by Japanese regulators next week.

Japan's Financial Services Agency scheduled the rare administrative law hearing for next Wednesday. The regulator is not often challenged when it levies punishment against market participants.

The FSA in June revoked Japan Advisory's license and fined the hedge fund in June, accusing it of insider-trading. Japan Advisory's founder, American Brogan, left Japan three days afterwards. But Japan Advisory, which said it had "temporarily closed," quickly announced that it would contest the FSA charges.

Brogan has not been charged with any wrongdoing. But the FSA found that Japan Advisory short-sold about US$6.8 million of Nippon Sheet Glass shares in August 2010, four days before the company announced it would sell new shares to raise capital. Regulators think that a former employee at Daiwa Securities Group—one of the Nippon Sheet Glass offering's lead bookrunners—passed the tip; Daiwa has apologized.

The FSA has said it will present "solid evidence" at the hearing; it took the unprecedented step of issuing a directive to a dozen banks seeking information about possible leaks to the hedge fund.

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